"The Temelin nuclear power plant is not,
in
itself, very important. We believe, however, that
with its help we will conclude other deals in the
field of nuclear energy in Eastern Europe."
- Nathaniel Woodson, general director, Energy

Westinghouse
Uncovered:Contract Scandals between
CEZ and Westinghouse

In May 1996, the Czech media started to discover
a serious scandal around three major contracts between CEZ and Westinghouse
- a contract to supply a unique information system to all power plants
owned by CEZ, and the two Temelin contracts - for the I&C System and
nuclear fuel. What became clear was that Westinghouse's
consultant - Jan Vadlejch - was influencing the decisions inside the CEZ
board of directors during the biddings for these strategic contracts.

Best documented is the first case, concerning the unique information
system. Allegedly, after Westinghouse won only the 3rd position in the
bidding, Vadlejch bribed some CEZ directors, to arrange a second round
of bidding, where competitors got an opportunity to modify their prices.
At the same time, information about other prices was leaked to Westinghouse,
who then cut its price by almost 50 % in order to submit the cheapest bid.
As a result, the contract was finally signed with Westinghouse.

It is worth mentioning that after managing to get the contract, Westinghouse
was not able to fulfill its commitments - its supplies are already delayed
by several months now.

This case is now being investigated by criminal police (See also TIS
No 6), and several pieces of evidence have been published - like the
letter from Vadlejch to one CEZ director, that contains strategy suggestions
(to announce the second round of bidding) and a promise of "fulfilling
our commitments" as a return for this service.

Consequently, two other contracts - for control systems and fuel - are
under scrutiny. In these cases as well, evidence of bid tampering has been
uncovered. The scandal around Westinghouse's contracts has been inquired
into and closely followed by the formost Czech newspaper Mlada Fronta DNES
(Today). So far, it has published over 20 major
articles on this issue, many of them on its front page.